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US adspend rises by 7% after three years on the slide

NEW YORK - After three years of decline, US adspend, boosted by growth from automotive and entertainment firms, is up by almost 7% for the first half of the year, a leap that has surprised industry analysts.

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According to research by TNS Media Intelligence/CMR, adspend in the US rose 6.8% from $57.7bn (£36.5bn) for the first half of 2002 to $61.6bn this year.

Steven Fredericks, chief executive of TNS Media, told The Wall Street Journal: "Consumers are spending and ad expenditures are finally catching up. The robustness surprised us."

Growth is coming from some of the biggest advertisers in the US, such as number one advertiser General Motors, which spent 11% more on advertising in the first half of the year, raising its spend to $1.27bn.

Packaged goods was another sector to help fuel growth, as sector giant Procter & Gamble increased its adspend by 31% to $1.26bn.

Walt Disney boosted its advertising spend by 19% to $632.5m as it backed the launch of films such as 'Finding Nemo' and 'Pirates of The Caribbean', which starred Johnny Depp as Captain Jack Sparrow.

The increase in adspend comes amid wide expectations that there will be a big upturn in 2004 with the US Presidential elections, the Athens Olympic Games and the European Football Championships, to be held in Portugal.

It supports comments Sir Martin Sorrell made last week when he said that the advertising giant was climbing out of the "bath" of recession. The WPP Group chief also said that growth in US government spending is greater at the moment than at any time since during the Vietnam War in 1967.

Network television was the only medium not to record a gain, according to the research, hurt by losses incurred during the invasion of Iraq. Consumer magazines saw growth of 11%, while the internet industry gained 15%.

TNS has warned that the next half of the year will be difficult to predict, but says it anticipates a rise of 5% in adspend. It had previously predicted an increase of 4.3%.

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